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Uncover 10 Simple Strategies to Boost Your Savings Today

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Uncover 10 Simple Strategies to Boost Your Savings Today
November 30, 2023

The first step to achieving financial freedom is to start saving diligently. However, once you’ve taken care of that goal, the next step is to increase your savings rate steadily. Only then can you make the transition from mere capital preservation to capital growth. If you’re looking for effective ways to boost your savings, here’s a handy guide for you.

1. Use a budgeting strategy

Creating a budget is crucial for managing your finances effectively. By categorizing your expenses and setting spending limits, you can allocate funds more smartly for each cost category. This helps in identifying areas where you can cut back and allows you to channel more money into your savings.

2. Increase your income

To accelerate your savings, look for ways to boost your income. This could include taking on part-time work or exploring side hustles. Increasing your income means you have more money coming in, making it easier for you to boost your savings. It also opens up opportunities to redirect your extra savings into the best investment options in India.

3. Reduce your debts

Another effective way to increase your savings is to minimize your debts and liabilities wherever possible. High-interest debts like credit card dues can significantly eat into your savings and leave you with little or no additional funds. Prioritize paying off these liabilities, so you have more money in hand to save each month.

4. Focus on your savings growth rate

Your savings growth rate is the percentage of annual increase in your savings. To boost your savings over time, you can set a specific savings growth rate of 10% to 20% (or higher if you can afford it). For instance, say you save Rs. 10,000 a month this year. If you set a savings growth rate target of 2%, you could increase your monthly savings to Rs. 12,000 next year.

5. Look for high-interest saving options

Consider depositing additional funds in a high-interest savings account, so you can earn more interest on idle money. Alternatively, you could also opt for flexi deposits, where you earn the benefit of high interest without compromising on liquidity. Higher interest rates allow your money to grow faster and contribute to quicker capital accumulation.

6. Invest your savings

Investing idle funds is an excellent strategy to grow your savings in an accelerated manner. Depending on your risk appetite, you can choose from the best investment options in India. Remember to diversify your portfolio of investments, so the risk is not concentrated on any one asset or asset class.

7. Tap into the power of compounding

Compounding can significantly increase the value of your savings over time because it involves reinvesting the earnings from your savings, so they can, in turn, earn their own returns. An investment calculator can help you understand how compounding can grow your savings over any given period. To truly tap into the power of compounding, start investing early.

8. Align your credit card rewards with your spends

Choose credit cards that offer rewards or cashback on your regular spending categories. For instance, if you travel frequently, a card that offers travel discounts can help you save more each time you book flight or hotel tickets. This strategy is a simple way to boost your savings without altering your spending habits.

9. Make use of budgeting apps

Budgeting apps can also be extremely useful if you’re looking for insights about growing your savings. They can track your income and expenses, offer insights and reminders to save regularly and streamline your financial management. They also simplify budgeting and help identify additional opportunities for saving.

10. Rebalance your investments

Depending on changing economic and market cycles, different investments may perform well at any given time. For instance, when the repo rates rise, fixed deposits may offer higher interest rates. Alternatively, during bullish stock market phases, market-linked investments may perform better. Rebalance your investments to benefit from these changes and optimise your savings.

Conclusion

If you’re already earning more than you spend and want to boost your monthly savings, a combination of the strategies outlined above can be highly effective. Once you find the techniques that work best for you, you’ll find it easy to save and invest for every financial milestone in life — right from repaying your debts or buying your dream home to paying for your children’s education and retirement planning.

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ARN – ED/11/23/6452

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal Vishal Subharwal

Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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